From Kevin Williamson at National Review:
The Left’s answer to the deficit: raise taxes to protect spending. The Left’s answer to the weak economy: raise taxes to enable new spending. The Left’s answer to the looming sovereign-debt crisis: raise taxes to pay off old spending. For the Left, every deficit is a revenue-side problem, not a spending-side problem, and the solution to every economic problem is more spending, necessitating more taxes. The problem with that way of looking at things is called Detroit, which looks to be running out of money in about one week. Detroit is what liberalism’s end-game looks like...
One lesson to learn from Detroit is that investing unions with coercive powers does not ensure future private-sector employment or the preservation of private-sector wages, despite liberal fairy tales to the contrary...
The second important lesson to be learned from Detroit is that there are hard limits on real tax increases... tax increases are sure to have real-world effects on everything from investing to immigration. At some point, the statutory tax increases will not increase actual revenue.
The third lesson is moral. Detroit’s institutions have long been marked by corruption, venality, and self-serving. Healthy societies have high levels of trust. Who trusts Detroit? This is not angels-dancing-on-the-head-of-a-pin stuff. People do not invest in firms, industries, cities, or countries they do not trust. Corruption makes people poor.
Detroit is liberal Democrat government, distilled and clarified, put on display for all to see. We need to take note.
We need to vote these leftist-Democrat gangsters out.
No, Detroit looks like what happens when a city is dominated by a single industry and then jobs move to places with cheaper labor. Ironically, Detroit sped up its own demise by making people more mobile. Thanks to the automobile and the highway, they can now live in the suburbs and work in the city.
ReplyDeleteWow. I've got to hand it to you, you've come up with a new one.
DeleteIn the days of electric inter-urban railways, one could work in the city and live in the suburbs. Read up on the Pacific Electric sometime.
DeleteAnd all this time we were lectured about how the Democrats were the party of "compassion."
ReplyDeleteThe Irony is that during the Obama administration we’re paying the lowest tax rates that most of us have ever seen, while all the wealth generated by the economy continues to flow to the wealthy at an accelerating rate. While the perception on the street is that the economy sucks, and indeed it does, many large corporations are once again enjoying record profits, and the net worth of billionaires is growing at rates that would be unimaginable for you or me.
ReplyDeleteYou are pathetic sheep. Your propensity for believing things on faith has allowed you to be manipulated by political forces that have no morals other than greed.
-KW
Oleg said: >>No, Detroit looks like what happens when a city is dominated by a single industry and then jobs move to places with cheaper labor.<<
ReplyDeleteThere's no doubt that there's some truth to what you're saying. I assume you're talking about third world labor. But then again, there is still some manufacturing in this country. Why haven't they moved yet?
Please keep your assertion in mind, however, the next time you hear some union member saying that we can increase the cost of labor in this country and it won't matter. We can still remain competitive, they say. Increasing the cost of labor most certainly does matter.
Some well-intentioned unions try to make things better for their members, the working people of America. Other not-so-well intentioned unions try to make things better for union leadership and get fat on union dues. In either case, however, the cost of labor is increased. That's one thing that unions do with absolute regularity--day and night, night and day, they never stop toiling for an increase in the cost of labor. Birds gotta fly, fish gotta swim, and unions gotta increase the cost of labor.
JQ
Auto industry jobs didn't all move to the third world. Hardly any, in fact. They require skilled labor and a resilient supply chain, both of which are hard to get in a developing country.
DeleteNo, these jobs moved to other parts of the US (e.g., Tennessee, Texas, Ohio, etc.), to Canada, and to Europe.
I assume you're talking about third world labor. But then again, there is still some manufacturing in this country. Why haven't they moved yet?
DeleteThink about this question: why don't most third world countries have a developed manufacturing sector. Once you answer that question, you may be able to figure out why manufacturing "hasn't moved [there] yet".
No, these jobs moved to other parts of the US (e.g., Tennessee, Texas, Ohio, etc.), to Canada, and to Europe.
DeleteThis raises a point that must be supremely puzzling to people like JQ and Egnor. The German economy is dominated by labor unions. Yet somehow, they manage to have a vibrant manufacturing base that does significant export business. For Egnor and his ilk I'm sure that this is an intractable conundrum.
>>Think about this question: why don't most third world countries have a developed manufacturing sector<<
DeleteLack of infrastructure is my first response.
JQ
>>This raises a point that must be supremely puzzling to people like JQ and Egnor. The German economy is dominated by labor unions. Yet somehow, they manage to have a vibrant manufacturing base that does significant export business. For Egnor and his ilk I'm sure that this is an intractable conundrum.<<
DeleteYes, that's the union member's response to the question every time. They always resort to the German example. How can Germany be an industrial leader when the price of labor is higher there than it is here?
So, manufacturers must not really care about the price of labor, eh? Isn't that the point you're trying to make? Tell that to Oleg. He said that manufacturers relocate to find cheaper labor. What a silly goose! Tell him it isn't true.
But all is not well in Germany. Their current unemployment rate is 7.4 percent, which is lower than ours but still not good. From 1991 until 2012, unemployment averaged 9.52 percent. Their lowest unemployment rate during this period was a shabby 6.4. That was the best they could do.
http://www.tradingeconomics.com/germany/unemployment-rate
Very few VW's are made in the Wolfsburg plant any longer, or anywhere in Deutschland for that matter. They're made in countries with cheap labor: Poland, Portugal, and Brazil.
BMW still has some assembly in Germany, but they also have a factory in South Carolina which is a right-to-work state. Mercedes has a plant in Alabama, also a right-to-work state.
So it's pretty clear that German companies care about the cost of labor too. It's just common sense.
I understand a desire to provide a better life for working people. But you have to understand that companies will always calculate the cost of labor as one key factor in where it will do its manufacturing. Oleg seems to get that. Why don't you?
JQ
It's not as simple as you make it, JQ. Yes, a company can relocate a factory to a place where labor is cheaper, but that has consequences. You will notice that a Volkswagen is easier to make than a BMW or a Mercedes. Japan still makes its Priuses in Japan.
DeleteWhere does GM fit in here? At some point, the American car makers have decided that the bottom line is more important than innovation. American cars of the previous decade did not inspire anyone. The middle class bought Toyotas and Hondas. The upper middle class went for BMW, Mercedes and Acura. I have not owned an American car for 10 years.
So it's not a surprise that GM, Ford, and Chrysler were more worried about cutting labor costs than their German counterparts. They made less sophisticated product. At this point, they have lost a big chunk of the market to the Germans and the Japanese and are losing the next segment to the Koreans. They will be competing with the Chinese next and it's a no-brainer who will win. They won't be able to just cut the labor costs.
If you're saying that the cost of labor is not the only factor, I agree with you. It is an important factor but there are others.
DeleteThe Detroit Big 3 are now in the black, which the Obama Administration touts as a major accomplishment.
But there isn't a company in the world that really enjoys paying more for labor. It's just that sometimes they make a trade-off--more expensive labor for another benefit.
I look for American cars made in America. Not "American" cars made in Mexico. I think there are some good ones. To each his own. You prefer imports and that's your decision.
That last comment should have been signed "JQ"
DeleteJQ
Sure, JQ, there is no point in arguing about tastes. However, I think we can agree that the urban decay in Detroit cannot be simply pinned on a political party as Egnor wishes to do. The reasons for that are more complex.
DeleteIn a nutshell, Detroit saw good times when the American car makers dominated the world. As time went on, the Big Three became more interested in the bottom line than innovation and had to cut labor costs to compete for the cheaper segment of the market.
Boom-to-bust is not exactly a unique experience of Detroit. Other cities suffered similar fate but managed to find new ways to attract jobs. Baltimore, where I happen to reside, lost its manufacturing but gained service, finance, and research industries. The city has lost a considerable fraction of the population to the suburbs. It has patches of urban blight with empty houses and shady characters roaming streets. But it also has nice urban areas (e.g., the Inner Harbor) revitalized thanks to the efforts of the city government.
We may not see eye-to-eye on everything, but I think Egnor's attempts to pin every single problem in the world on atheists or Democrats look pathetic to anyone who is not a right-wing nut.
Detroit had every advantage and squandered them all. It had wealth, infrastructure, an educated population and plenty of tax revenue. If you can't turn that into success, you got problems. The world changed and Detroit, managed by progressives who, in economic terms at least, are prone to cling to the past, got beat out by other places that changed with the times.
DeleteVery few VW's are made in the Wolfsburg plant any longer, or anywhere in Deutschland for that matter.
DeleteYou do realize that there is more to a manufacturing sector than automobile plants, right? And it isn't just Germany. Several countries manage to have strong unions and still have effective, productive economies. How they do this must be a mystery to you.
Anon. Unions are like people. Some are suicidal. Some are not. Does that explain it to you?
DeleteAuto industry jobs moved to right-to-work states, yes. And also to places like Mexico and Brazil, borderline third world nations.
ReplyDeleteMexicans and Brazilians probably wouldn't like their countries characterized in such a way, but...
My point is that the price of labor is a major consideration in where a factory will be located. That seems like common sense, but don't tell a dyed-in-the-wool union member that. They simply don't want to hear it.
JQ